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  • Tax

    BTL into LTD CO?

    I have been told I can transfer my btl into a ltd co and not pay any cgt as this is my sole business activity.

    This could help with cgt & iht presumably with just stamp duty to pay?

    Just wondering if anyone has experience of this?

    If so, what is the base cgt value if we ever sell? will it be today's value or value when purchased?

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    In effect you start again. Your original purchase price plus any additional capital expenditure and buying costs gives you base price. The difference between that and the price of the sale is the capital gain. Had it ever been your sole or nominated residence there would be allowances and partial exemptions..

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    ok thanks, just working out best way to transfer to my sons who will need the cash for university fees, someone suggested discretionary trusts as well or simply making a gift?

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    If you intend to incorporate you will need to own your properties in partnership.You will also need to be a substantial business IE own several properties and devote at least 20 hours a week to the business.Gifting may incur cgt and sdlt and you will have to gift at market value

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    There are two camps on this topic

    My own Tax advisor and ex NLA Rep and a Landlord

    told me there is no easy way of doing this other than to sell your own property into you company with all the costs of Stamp Duty CGT Legal fees and Mortgage arrangement fees eice ct

    He to is effected by S24 and as he says HE WOULD GO DOWN THE ROUTE if it was safe to do so

    A number of advisors say it can be done But personally I am not going down that route because its not proven it works

    But you must seek advice and act on that advice as you feel fit


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    Learn Change and Adapt ?????


    It is sometimes the case that a tax advisor has never been down a certain route  such as S162 incorporation relief and would therefore understandably not be prepared to advise  their clients to take that route.

    My accountants who are are a fairly substantial company have had no hesitation in calling in the likes of KPMG over the years(at my companies cost of course) for advice were they are unsure of a position.

    My point is if you are thinking of incorporating using S162 or any other tax matter that concerns you use a firm that majors in the subject and works for you and not hmrc

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    Thanks for that Don

    I know when S24 came into force I had a good look at my bussiness

    I went to see Three  Tax advisors and listened to the advice

    Each one had a different view on this

    I came to my own conclusion

    The Property I am selling into my Company will not pay CGT because the property being sold has not made a lot of Capital Growth and using mine and my wifes CGT allowncs

    The Bill is Nil I started selling property Two Years ago and I will continue for the next Two years until I reach a Point where Have deleveraged  as much as I can

    I had to cheery pick the property with no gains to do this

    So the Bill to do what I call The Landlord Shuffle is only 4k per property

    and using a cash back mortgage the bill I have to pay is 2k per property in round figs

    I did not have to take a chance on this being investigated by HMRC

    If I was a SE investor with huge capital gains I may have taken a different route and tried for S162

    I know I can not avoid but if I had done nothing my Tax Bill would have been 5 times higher

    with my Plans my Tax Bill will be twice as high which is manageable

    so its Horses for Courses.

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    Learn Change and Adapt ?????


    Absolutely DL i like your way of thinking and i admire the diversity of your business and investments

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    Thanks Don

    I can only but try ?

    I love what I do and no bloody Govt is going to take it off me

    Kindest Regards

    DL


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    Learn Change and Adapt ?????